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September 17, 2003
Green Opposes Internet Tax Act
Washington, DC - Today, on the floor of the House of Representatives, Congressman Gene Green (D-Houston) spoke in opposition to H.R. 49, the Internet Tax Nondiscrimination Act, citing the bill’s negative impact on Texas’ state budget.  The bill would permanently deny states the revenue generated from their current Internet access taxes.
 
“My opposition stems not from wanting to tax Internet access or to impose dual taxes on e-commerce,” said Green. “I oppose this bill because it does not follow the precedent set by previous Internet Tax Moratorium legislation holding harmless states that enacted access taxes previous to 1998.”
 
When Congress in 1998 enacted the Internet Tax Freedom Act to prohibit states from taxing Internet access or commerce, it exempted states that already had imposed Internet access taxes.  Texas was one of only ten states whose laws were grandfathered into the 1998 Internet Tax Freedom Act.  While Congress respected state laws in the 1998 law, and again, when it extended the law in 2001, the bill before the House today would permanently pre-empt state law and would eliminate an important revenue source for the state of Texas.
 
“This bill would have an enormous economic impact on the state of Texas – an effect that may be felt as early as November of this year,” added Green. “Like many states, the state of Texas is facing a budget problem, and I cannot support legislation that would take away $45 million in annual revenue that my state has been depending on for the past five years.”
 
“This $45 million goes toward critical state programs, such as children’s health insurance (CHIP), schools, and teachers’ health care, that are in desperate need of this funding,” stressed Green. “I hope that we can work to adopt the 3 year extension language in the Senate version of this bill so that we can continue to hold harmless these states that depending on this crucial funding.”
 
Based on 2000 revenue figures, Texas stands to lose the most under this bill, with a $45 million loss in revenue.  In addition to Texas, Connecticut would lose $15 million, Ohio $12 million, Wisconsin $7.5 million, Tennessee $4 million, North Dakota $2.5 million, South Dakota $1.7 million, and New Mexico $1 million.
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